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For a second consecutive year Canadian contractors will see their benefits recede

For a second consecutive year Canadian contractors will see their benefits recede

As a direct consequence of weakening demand for new housing Canadian contractors must expect diminishing benefits during the year 2008, according to the Conference Board of Canada, with a cyclical note consecrated to the residential construction industry. This diminution of benefits appears for a second consecutive year.

Michael Burt, associate director of Prévisions industrielles (Industrial Forecasts), has said: « This fall is in fact a long-awaited correction of the market as, for several years, housing supply exceeded demand. We are headed now towards a market favourable to buyers, a trend set by a return to a more normal pace of activity in the fields of construction and the sale of apartments. »

« As market conditions in the United States have little impact on the Canadian market, few things allow us to expect an imminent market collapse in Canada. Moreover, Canadian institutions are much more prudent in their lending practices. »

After having known, during the last few years, important accelerations in many markets, the pace of growing prices has now considerably slowed down. One notices that new housing prices know their lowest growth rate since 2002, whereas demand is curbed by deteriorating economic conditions and the affordability of housing.

Between 2004 and 2006, benefits of contractors have doubled. On the other hand, for the [building] industry as a whole, benefits have diminished by 16 % last year and they are expected to recede by 3 % still this year to establish themselves at 3,6 billion dollars. They should also fall in 2009 and begin to climb the slope again in 2010. This redress should continue in the years to come as one expects a stabilization of the market and recovering demand.

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Québec Landlords Association (1)

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